June 3, 2014—The Health Resources and Services Administration plans in the coming months to issue two more proposed 340B program regulations on top of its comprehensive program rule currently slated for release in July. [ms-protect-content id=”2799″]
The first of the two new rules, targeted for release in December, will address the extent to which state AIDS drug assistance programs can collect 340B rebates from drug manufacturers when the ADAPs purchase insurance and/or pay premiums, copayments, and deductibles for ADAP clients. HRSA posted a letter from Administrator Mary K. Wakefield on its HIV/AIDS Bureau website on Jan. 31 saying a rule on the subject was forthcoming.
The second new regulation, due for release in February 2015, would modify allowable uses of 340B-derived program income by hemophilia treatment centers. The Hemophilia Alliance, which represents HTCs enrolled in 340B, has asked HRSA’s National Hemophilia Program in the past to clarify, for example, whether they may use income derived from their participation in 340B for:
- research
- their and their hosting institutions’ indirect costs
- patient assistance
- educational and training purposes
The Department of Health and Human Services disclosed the two new 340B regulations on May 23 in the latest semi-annual regulatory agenda for the entire federal government. May 23 was the same day that a federal district judge invalidated HRSA’s first-ever 340B regulation, which interpreted the statutory exemption on discounts on orphan drugs for rural and freestanding cancer hospitals. In that ruling, U.S. District Judge Rudolph Contreras said that Congress “specifically limited” HHS’s authority to make rules for 340B and that HHS had not been granted “broad rulemaking authority to carry out all the provisions of the 340B program,” including the 340B orphan drug exclusion.
Judge Contreras said Congress authorized HHS to make rules for the 340B program only in three places: (1) the establishment of an administrative dispute resolution process, (2) the “regulatory issuance” of precisely defined standards of methodology for calculation of ceiling prices, and (3) the imposition of civil monetary sanctions.
HRSA issued advanced notices of proposed rulemaking for the 340B dispute resolution process and drug manufacturer civil monetary sanctions in September 2010 and solicited public comments for 60 days, but took no further action. The new semi-annual agenda lists both as “long-term actions” with next steps “to be determined.”
HRSA’s comprehensive 340B regulation, also known as the mega-reg, is expected to cover: the definition of an eligible patient, contract pharmacy arrangements, hospital eligibility criteria, and eligibility of off-site facilities. Several commentators say Judge Contreras’ ruling casts considerable doubt on whether HRSA has authority to regulate 340B in those areas. [/ms-protect-content]